India’s crude oil import expenditure surged in the first quarter of 2026-27, even though the country bought less crude by volume. The sharp rise in spending shows how geopolitical disruptions and elevated international oil prices can quickly increase India’s energy costs. According to data from the Commerce Ministry, India spent $49 billion on crude imports between April and June, marking a 26 per cent increase from the $39 billion recorded during the corresponding period last year.
The increase came despite crude purchases dropping to 59.7 million tonnes (MT) from 73 MT a year earlier. The divergence between import volumes and expenditure was largely driven by higher international crude prices following disruptions linked to the conflict in West Asia.
India remains heavily dependent on overseas supplies to meet its energy requirements. The country, which ranks among the world’s largest ,sources around 88 per cent of its annual consumption from international markets.
That dependence makes domestic fuel costs and the broader economy vulnerable to movements in global oil prices as well as fluctuations in the rupee.
The geopolitical crisis in West Asia added another layer of pressure during the quarter. Crude prices had been trading below $70 a barrel before the US-Iran conflict escalated in February. Prices subsequently climbed as concerns grew over shipments passing through the Strait of Hormuz.
The strategic waterway is responsible for roughly one-fifth of global oil transit. Around 40 per cent of India’s crude purchases from West Asian suppliers also travelled through the route, increasing the potential exposure to any disruption.
US-Iran War Impact
The escalation in the region sent Brent crude close to $120 per barrel at the height of the conflict. For an importer such as India, even relatively small changes in global crude prices can have a significant effect on the overall import bill.
India purchases approximately 1.8 billion to 2 billion barrels of crude annually. As a result, every $1 increase in the average price of a barrel can potentially add about $2 billion to the country’s yearly oil import expenditure.
The rupee’s depreciation during the period further increased the domestic cost of purchasing crude in international markets.
Import costs were also not uniform across suppliers. Freight charges, insurance expenses and additional war-risk premiums affected the final price paid by Indian refiners.
Russia supplied crude at an average price of $2,408 per tonne during the quarter, while the average cost of crude sourced from the UAE stood at $2,213 per tonne.
Russia continued to dominate India’s crude import basket during the first quarter of FY27. The country supplied more than 40 per cent of India’s total crude imports, maintaining its position as the largest source of overseas oil for Indian refiners.
The UAE ranked second, contributing 14.6 per cent of total imports. Saudi Arabia followed with a 9.9 per cent share, while Venezuela and Oman accounted for 5.2 per cent and 4.5 per cent, respectively.